The Silicon Valley REALTORS® Charitable Foundation donated $44,800 in 2010 to different non-profit organizations that help low-income individuals and families in Silicon Valley. The Charitable Foundation is a trust which makes grants available to organizations from donations by REALTORS®, affiliate members and friends of the Silicon Valley Association of REALTORS® (SILVAR).

Also in 2010, as part of its Scholarship Program, the Silicon Valley REALTORS® Charitable Foundation presented a $1,000 scholarship grant to each of 18 graduating seniors from public high schools in the Silicon Valley communities. 2010 is the 11th year the Foundation has been assisting students with the scholarship grants.

“Local nonprofits have been hit hard by the weak economy and unemployment,” said 2010 Silicon Valley REALTORS® Charitable Foundation president Lisa Keith. “We thank our members and friends who, even in this difficult year, have been very generous with their donations.”

At a recent Menlo Park/Atherton District meeting, the Silicon Valley REALTORS® Charitable Foundation Trust presented $2,500 to the Westwind 4-H Riding Program for the Handicapped. Silicon Valley REALTORS® Charitable Foundation President Lisa Keith (right) presented the grant to Judy Lookabill, board member of the Westwind Riding Institute.

Non-profit organizations operating within the areas served by the Silicon Valley Association of REALTORS® are eligible for grant consideration provided they meet the evaluation criteria below. Grant applicants are evaluated on the following guidelines:

The community need for the expenditure, as well as the number of people who will be served;

The impact on the recipient organization;

The location of the community served; (Although requests for state, national and international projects are considered, preference is given to projects with a more local base.)

The financial soundness and efficiency of the organization;

Accuracy and completeness of the application;

The structure of volunteer organization and level of volunteer support; and

Appropriate use of the Foundation’s previous grants (if applicable).

The Charitable Foundation Trustees meet quarterly (March, June, September, and December) to evaluate applications. Applications must be received by Feb. 15, May 15, Aug. 15, and Nov. 15 in order to be considered at the quarterly meeting. For more information and details about the Charitable Foundation grants and an application form, visit www.silvar.org, or call SILVAR at (408) 200-0100.

Sales in November picked up from the previous month in the state of California and nationwide. This is a sign that the market is recovering on its own, according to REALTOR® officials.

The California Association of REALTORS® reported last week that California home sales rose in November, though down from the previous year. Closed escrow sales of existing, single-family detached homes in California totaled 490,950 in November, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Sales were up 9.2 percent from October’s revised pace of 449,480, but down 8.6 percent from November 2009.

The statewide median price declined from both the previous month and previous year. The November 2010 median price was $296,820, down 2.4 percent from October’s $304,220 median price and down 2.5 percent from the revised $304,550 median price in November 2009.

Santa Clara County home sales rose 6 percent in November from that of the previous month, but were down 8.6 percent from November 2009. The November median sales price of a single-family detached home was $589,980, down 7.5 percent from October when it was $637,750, and down 2.5 percent from November 2009, when it was $605,000.

“Sales last year were spurred by the government home buyer tax credit program,” said Jeff Bell, president of the Silicon Valley Association of REALTORS®. “We are now seeing market gains, without help from the stimulus program, and this is a positive sign.”

The Silicon Valley cities of Saratoga, Los Gatos and Cupertino continued to rank among the top 10 cities with the highest median home price during November 2010. Saratoga’s median home price in November was $1,235,000; Los Gatos, $850,000; and Cupertino, $850,000.

The National Association of REALTORS® also reported last week that November’s existing-home sales (completed transactions that include single-family, townhomes, condominiums and co-ops) rose 5.6 percent to 4.68 million from 4.43 million in October, but are 27.9 percent from November 2009. The national median existing-home price for all housing types was $170,600 in November, up 0.4 percent from November 2009. Distressed homes accounted for 33 percent of November sales.

“Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable,” says NAR chief economist Lawrence Yun.

Yun says the relationship between mortgage interest rates, home prices and family income continues to be the most favorable on record for buying a home since NAR started measuring in 1970.

During 2010, two new permanent information reporting requirements have been added to the duties of property owners and owners of small businesses (including self-employed individuals and independent contractors).

The recently enacted small business legislation (HR 5297) included an expansion of the 1099 reporting related to a trade or business. To date, only those real estate professionals engaged in property management-type businesses have been required to file Forms 1099. Congress has extended the Form 1099 requirement to any person who receives rental income. This requirement would apply to any landlord (including a small investor), rather than only those who are in the business of managing property.

Starting in 2011, any person who receives rental income must provide a Form 1099 for all payments of $600 or more made to service providers, such as plumbers, carpenters, yard services and repair workers. The purchase of goods is not included within the reporting requirement. The Form 1099 is provided to the IRS and to the service provider. The new requirement applies to both residential and commercial property.

Also, the Health Care Reform legislation enacted earlier this year adds a new, controversial and burdensome reporting requirement that goes into effect in 2012. The 2012 reporting requirement affects any business that makes a payment of $600 or more to any payee (except a tax-exempt organization) for property and services. This provision expands the 1099 information reporting requirement of current law.

Several amendments were offered, supported by the National Association of REALTORS®, to the small business legislation that would have repealed, or at least mitigated the impact of this new requirement. Those efforts failed. The amendments to mitigate the impact would have imposed the requirement only on those businesses with more than 25 (or 50) employees and/or payments of more than $5,000 to any particular vendor or service provider.

Bottom Line for Real Estate:

Current Law: Information reporting requirements apply only to businesses.

2011 Rule: All persons who receive rental payments must provide Form 1099. This affects all owners (both individuals and businesses) of rental properties, both residential and commercial. Thus, “mom and pop” investors and those who invest in real estate for their personal portfolios are subject to the new reporting requirement. Only aggregate annual payments of $600 or more for services (but not goods) must be reported.

2012 Rule: All businesses, including real estate businesses, self-employed individuals and independent contractors will be required to make a 1099 report of any aggregate annual payment of $600 or more to any person from whom they acquired goods and services.

Dan Lachman, program manager of The Housing Trust of Santa Clara County, wants REALTORS® to inform their clients that The Housing Trust can provide assistance to first-time home buyers.

“We have money to help your first-time home buyers,” Lachman announced at a recent REALTOR® meeting.

The Housing Trust offers three main financial assistance programs for first-time home buyers – the Closing Cost Assistance Program (CCAP), the Mortgage Assistance Program (MAP) and Equity Share Co-Investment (ESCO):

Closing Cost Assistance Program (CCAP)
The Housing Trust will provide up to $6,500 to help pay for closing costs and other transaction expenses associated with purchasing a first home. This program provides a deferred loan of 3 percent of the purchase price up to $15,000 for down payment and/or closing costs. The loan is not repaid until the house is sold or the owner refinances. No interest or principal payments are due during the term of the loan.

Mortgage Assistance Program (MAP)MAP is a second mortgage of up to $35,000 available to first-time home buyers in Santa Clara County. The Housing Trust MAP loan is a conventional second mortgage, with interest and principal payments due monthly and compatible with most banks and credit unions. It is a 30-year amortizing loan with the interest rate at 1.5 percent above the rate of the first loan.

To qualify for the CCAP and MAP, the income of a single-member household cannot exceed $86,950, or household income for a four-member household cannot exceed $124,200.

Equity Share Co-Investment (ESCO)
The Housing Trust will advance as much as $75,000 to first-time home buyers. The money will be used to match a buyer’s down payment. Payments on the ESCO loan will not be due until 15 years later, or until the house is sold or the borrower refinances. The borrower repays the loan based on the appreciation of the home in equal proportions to the amount of the original down payments. To qualify for the program, the income of a single-member household cannot exceed $103,390, or the household income of a four-member household cannot exceed $147,700.

Since 2001 The Housing Trust has provided 2,100 down payment assistance loans. Also, The Housing Trust’s definition of first-time home buyer is different from the state or federal government’s definition. A person who has not owned a home in Santa Clara County during the last three years is considered a first-time home buyer by The Housing Trust and may apply for assistance, according to Lachman.

Ask your REALTOR® about The Housing Trust of Santa Clara County, or visit www.housingtrustcc.org to learn more about these and other assistance programs.

The National Association of REALTORS® (NAR) is again asking REALTORS® to contact their members of the U.S. Senate to warn them about the dangers to the housing market and the economy of reducing or eliminating the mortgage interest deduction and making other tax changes that could hurt home owners. SILVAR members should have received a second Call for Action this week from NAR. Its launch came as a response to the co-chairs of President Obama’s bipartisan Federal Deficit Reduction Commission, charged with the task of finding ways to balance the budget by 2015 and to reduce the deficit by $4 trillion by 2020, release of their recommendations in a draft report titled “The Moment of Truth.”

The plan called for significant reductions to the mortgage interest deduction and other major tax reforms. The panel recommended converting the deduction to a 12 percent non-refundable tax credit available to all taxpayers, capped at $500,000, and limited to principal residences only (no credit for interest from second residence and equity). The panel also recommended the elimination of itemized deductions and the taxation of capital gains as ordinary income.

The deficit commission voted on the plan last week, and while it received a majority 11-7 vote, it fell short of the super-majority needed (a vote of at least 14 of its 18 members) to prompt immediate congressional action. Regardless of the outcome of the vote, it is imperative REALTORS® make their voices heard now because individual recommendations, like cuts to the MID and other programs impacting home ownership, could be included in federal budget legislation in early 2011.

The tax deductibility of interest paid on mortgages is a powerful incentive for home ownership and has been one of the simplest provisions in the federal tax code for more than 80 years. In a new survey commissioned by NAR and conducted online in October 2010 by Harris Interactive of nearly 3,000 homeowners and renters, nearly three-fourths of homeowners and two-thirds of renters said the mortgage interest deduction was extremely or very important to them.

Recent progress has been made in bringing stability to the housing market and any changes to the MID now or in the future could critically erode home prices and the value of homes by as much as 15 percent, according to NAR’s research. This would negatively impact home ownership for millions of Americans, including those who own their homes outright and have no mortgage.

Any further downward pressure on home prices will hamper economic recovery, raise foreclosures and hurt banks’ abilities to lend and likely tip the economy into another recession, resulting

Member of the Silicon Valley Association of REALTORS® (SILVAR) presented three grants this week, which will help children and, hopefully, make their holiday season brighter.

At the Menlo Park/Atherton District meeting on Monday, the Silicon Valley REALTORS® Charitable Foundation Trust presented $2,500 to the Westwind 4-H Riding Program for the Handicapped. Silicon Valley REALTORS® Charitable Foundation President Lisa Keith presented the grant to Judy Lookabill, board member of the Westwind Riding Institute.

Westwind 4-H Riding for the Handicapped has been providing horseback riding instruction for children with physical handicaps since 1978. Westwind Community Barn in Los Altos Hills is the home base of the Westwind 4-H riding program.

Lookabill thanked SILVAR members for the donation and continued support of the 4-H program. She said the benefits of horse riding are both psychological and physiological. The program builds confidence and self-esteem; develops coordination and balance; and is one of the few recreational activities, other than swimming, that is truly physically therapeutic, since it requires the involvement of the whole body and utilizes every muscle and joint.

On Wednesday, SILVAR’s Los Gatos/Saratoga District presented a check for $3,990 to EMQ FamiliesFirst in Los Gatos. The donation came from proceeds from the district’s annual pumpkin auction. Los Gatos/Saratoga District Chair Bill Rehbock presented the check to Bettina Kohlbrenner, executive director for fund development for the agency.

Los Gatos/Saratoga District Chair Bill Rehbock is pictured here with Bettina Kohlbrenner, executive director for fund development for the agency.

EMQ (Eastfield Ming Quong) FamiliesFirst helps children in crisis and their families. The agency provides shelter and care to children who are displaced and whose families are unable to care for them, so that they can recover from trauma, abuse and addiction, and rebuild their lives. Kohlbrenner said the agency currently cares for 40 children in the area. She thanked the district for its generous donation.

“Your donation will help make the holidays brighter for these children,” Kohlbrenner told SILVAR members.

Child Advocates of Santa Clara & San Mateo Counties trains and supports Court Appointed Special Advocate (CASA) volunteers to work one-on-one with abused and neglected children. A CASA volunteer speaks up for a child’s best interests, helping to ensure that he or she will live in a safe and loving environment and has the resources needed to grow up healthy and strong. Williams said the child advocates are “like big brothers and big sisters with teeth,” who serve as champions of the children and look out for their best interest.

The Foundation’s grant will help underwrite the cost of recruiting, training and supervising additional volunteer advocates for the over 200 children currently on their list. Williams thanked SILVAR for the donation and noted it comes at a good time, and will provide great help for the children during the holidays.

Child Advocates of Santa Clara & San Mateo Counties trains and supports Court Appointed Special Advocate (CASA) volunteers to work one-on-one with abused and neglected children. A CASA volunteer speaks up for a child’s best interests, helping to ensure that he or she will live in a safe and loving environment and has the resources needed to grow up healthy and strong. Williams said the child advocates are “like big brothers and big sisters with teeth,” who serve as champions of the children and look out for their best interest.

The Foundation’s grant will help underwrite the cost of recruiting, training and supervising additional volunteer advocates for the over 200 children currently on their list. Williams thanked SILVAR for the donation and noted it comes at a good time, and will provide great help for the children during the holidays.

Also, in late November, SILVAR members of the Palo Alto District celebrated the district’s annual Partners in Education(PiE) Campaign and presented a check for $30,740 to the PiE Foundation and Palo Alto Unified School District.

Palo Alto Partners in Education is a nonprofit foundation dedicated to supporting Palo Alto public elementary, middle and high schools by raising money to meet classroom needs otherwise left unfunded. PiE funds support programs in art, home to school translations, math and science.

The National Association of REALTORS® is asking REALTORS® to contact their members of Congress to warn them about the dangers to the housing market and the economy of reducing or eliminating the mortgage interest deduction and making other tax changes that could hurt home owners. REALTORS® should have received the Call for Action on Wednesday night. Its launch came just hours after the co-chairs of President Obama’s bipartisan Federal Deficit Reduction Commission, charged with the task of finding ways to balance the budget by 2015 and to reduce the deficit by $4 trillion by 2020, released their recommendations in a draft report titled “The Moment of Truth.”

The plan called for significant reductions to the mortgage interest deduction and other major tax reforms. The panel recommended converting the deduction to a 12 percent non-refundable tax credit available to all taxpayers, capped at $500,000, and limited to principal residences only (no credit for interest from second residence and equity). The panel also recommended the elimination of itemized deductions and the taxation of capital gains as ordinary income.

The deficit commission voted on the plan today, and while it received a majority 11-7 vote, it fell short of the super-majority needed (a vote of at least 14 of its 18 members) to prompt immediate congressional action. Regardless of the outcome of today’s vote, it is imperative REALTORS® make their voices heard now because individual recommendations like cuts to the MID and other programs impacting home ownership could be included in federal budget legislation in early 2011.

The tax deductibility of interest paid on mortgages is a powerful incentive for home ownership and has been one of the simplest provisions in the federal tax code for more than 80 years. In a new survey commissioned by NAR and conducted online in October 2010 by Harris Interactive of nearly 3,000 homeowners and renters, nearly three-fourths of homeowners and two-thirds of renters said the mortgage interest deduction was extremely or very important to them.

Recent progress has been made in bringing stability to the housing market and any changes to the MID now or in the future could critically erode home prices and the value of homes by as much as 15 percent, according to NAR’s research. This would negatively impact home ownership for millions of Americans, including those who own their homes outright and have no mortgage.

Any further downward pressure on home prices will hamper economic recovery, raise foreclosures and hurt banks’ abilities to lend and likely tip the economy into another recession, resulting in further job losses for the country. It will effectively close the door on the American dream.

REALTORS® must remain vigilant in opposing any plan that modifies or repeals the mortgage interest deduction. Please answer NAR’s Call for Action now and let your representatives know that the Mortgage Interest Deduction (MID) is vital to both home ownership and our economy.

Today, in a draft document titled “The Moment of Truth” the co-chairs of the President’s Deficit Reduction Commission proposed how the federal government should address ongoing budget shortfalls and an ever-growing national debt. This week, the 18-person commission is scheduled to vote on this report, which requires a 14-vote majority for approval.

Embedded in the 66-page draft is a proposal to significantly rewrite the federal tax code (figure 7 on page 31 gives the best explanation). Here are the four big tax changes proposed that would impact homeowners and REALTORS®:

Mortgage interest deduction (MID) would be capped at $500,000, and no deduction will be allowed for interest paid from a second residence or equity loans.

Continuation of standard deductions, but elimination of itemized deductions.

Change from a five to three income tax brackets, taxed at the following rates12%, 22%, and 28%.

All capital gains and dividends will taxed at ordinary income rates, which will mean an increase for the two upper income brackets.

Regardless of the vote this week, Congress would still need to propose, debate and pass many of these recommendation before the President could sign any into law. The National Association of REALTORS® (NAR) has already announced its opposition to any tax reform plan that does not retain the deductibility of mortgage interest. NAR also opposes any effort to convert the mortgage interest deduction from a deduction to a tax credit, and firmly believes that the MID is vital to the stability of the American housing market and economy.

Specific government incentives for homeownership in this country have existed for more than 150 years. That’s because homeownership helps foster communities, creates social stability, builds wealth over the long term, and contributes significantly to the U.S. economy. Realtors® believe that anyone who is able and willing to assume the responsibilities of owning a home should have the opportunity to pursue that dream.

If modifications to the mortgage interest deduction are moved forward, beyond an attack on homeowners, this will also be a three-pronged attack on the middle-class, the state of California, and the next generation of homeowners. Changes to the MID to enhance federal coffers would simply be a transfer from state and local governments, including school districts, that rely heavily on property tax revenues. Many cities in Silicon Valley have median home prices far above $500,000. Under this proposal, the negative impact felt here locally will be unequivocally greater than in other parts of the nation.

The tax deductibility of interest paid on mortgages is a powerful incentive for home ownership and has been one of the simplest provisions in the federal tax code for more than 80 years. In a new survey commissioned by NAR and conducted online in October 2010 by Harris Interactive of nearly 3,000 homeowners and renters, nearly three-fourths of homeowners and two-thirds of renters said the mortgage interest deduction was extremely or very important to them.